UPDATE 1-Canada refuses to say if G7 aimed at Japan on forex

Tue Feb 12, 2013 7:03pm EST
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* Declines to endorse view that Japan was targeted

* Says G7 tried to calm rhetoric; doesn't want more noise

* Sees outright FX intervention mostly counter to G7 statement

* Hopes Moscow G20 talks will not be distracted by FX

OTTAWA, Feb 12 (Reuters) - Canada declined on Tuesday to say whether the Group of Seven (G7) leading industrialized nations had targeted Japan in the group's statement on foreign exchange rates.

A senior Canadian finance official was asked on a call with reporters whether he endorsed the view that the G7 communique did not aim at any country, or the view it was aimed at Japan. He would only say the communique was meant to strike a balance.

The G7 statement on Tuesday morning, seeking to calm fears of a currency war, committed members to using fiscal and monetary policies for domestic objectives and not to target exchange rates.

The Canadian official said the G7 had decided the statement was necessary to calm the rhetoric about currencies over the past few weeks, which he added had not been helpful, and Canada did not want to add to that noise.

The official was speaking at the end of a day of turmoil on foreign exchange markets, in which Japan interpreted the G7 statement as giving it a green light to pursue reflation, prompting an official from another G7 nation to say that the group was in fact concerned about excess moves in the yen and about unilateral guidance on the yen.   Continued...